Inner House rules Motherwell tenant in sisted breach of duty action allowed to amend proceedings

Lord Carloway
Lord Carloway

A tenant of a local authority housing site in Motherwell has successfully sought a review of the decision not to allow her to amend her pleadings in an action for damages against her landlords.

Caroline Cowan had a secure tenancy of a property in the Watling Street development in Motherwell, which was found to be built on land contaminated by solvents. She brought an action against Lanarkshire Housing Association Ltd averring a breach of duty.

The appeal was heard in the Inner House of the Court of Session by the Lord President, Lord Carloway, sitting with Lord Menzies and Lord Brodie.

Sisted pending resolution

The pursuer originally raised the action in September 2012. She had entered into a secure tenancy with the defenders in 2005 at the site, and as a consequence was exposed to volatile organic compounds from chemical solvents used on the site when it was used for the treatment of clothes from demobilised soldiers after the Second World War and then later as a factory.

Damages were sought for two breaches of duty by the landlords; a breach of their implied contractual obligation to provide a tenantable and habitable house at the beginning of the tenancy, and a breach of their repairing obligations to keep the house reasonably fit for human habitation as per paragraph 1(a) of Schedule 4 of the Housing (Scotland) Act 2001. On her application form as required by RCS 43.2, this was abbreviated as Schedule 4 of the 2001 Act.

The case was sisted multiple times pending the resolution of McManus v City Link Development Co Ltd, another case raised against the defenders, as well as the developers and environmental consultants for the site, by other tenants of the site. Whilst the action against the developers failed, the action against the environmental consultants, Scott Wilson Scotland Ltd, continued.

The McManus case against the defenders proceeded on the basis of the same implied contractual term as in the pursuer’s case, as well as a statutory duty to make the house habitable at the beginning of the tenancy. The Lord Ordinary held that the implied term had not been breached because a house could not become uninhabitable either because of its location or its construction on contaminated land.

The statutory case also failed due to a lack of averments about the state of the property prior to the commencement of the tenancy. The case proceeded to the Inner House on appeal on this ground, but again failed, with the court noting that there were no averments from the pursuers that contaminated vapours permeated the property at the beginning of the tenancy.

On 7 July 2017, the final sist of the pursuer’s case expired without renewal, with neither party aware of the expiration despite the date being stated on the interlocutor. She obtained an expert report in support of her position that there were vapours in the property at the start of the tenancy in October 2018, with her agent writing to the defenders to inform them they intended to awaken the case.

In February 2019 the defenders enrolled a motion to dismiss all the actions against them due to the lead McManus case being dismissed. The Lord Ordinary refused the pursuer’s motion to sist. The pursuer then submitted a minute of amendment seeking to replace all the averments in the original claim, as well as delete the common law case following the McManus decision.

The proposed amendments were refused by the Lord Ordinary. He reasoned that the amendments would alter the case from an unspecified statutory case to a specific one, and given the length of time that had passed from the start of the tenancy that claim would have prescribed under the Prescription and Limitation (Scotland) Act 1973.

On appeal, the pursuer submitted that the amendments proposed only made the pleadings more specific for an ordinary action, and were based on the same statutory duty. She also submitted that the Lord Ordinary’s decision had resulted in a procedural injustice, and that he erred in the exercise of his discretion in not remitting the action to the ordinary roll.

No material difference between the cases

The opinion of the court was delivered by Lord Carloway. Regarding the Lord Ordinary’s analysis that the proposed amendments would create a new claim, he said of the pursuer’s original case: “Although there may be questions to be asked in due course about which particular duty the pursuer is relying upon, for the purposes of abbreviated pleadings the averment encompasses the Schedule 4 duty, or duties, [under the 2001 Act] to ensure that the house was, at the commencement of the tenancy, reasonably fit for human habitation and to keep the house in such a condition throughout the tenancy.”

He continued: “There is no material difference (other than the deletion of the common law case) between the case averred in the chapter 43 summons and the expanded case sought to be substituted by way of amendment. There is therefore no issue of limitation of actions under section17 of the Prescription and Limitation (Scotland) Act 1973 and, in particular, no protection to be afforded to the defenders under section 17(2). The cases are fundamentally the same.”

Noting the embryonic stage of the proceedings, he said: “In requiring a Minute of Amendment instead of a normal adjustment period, the Lord Ordinary withdrew from the pursuer the customary period in which she could adjust her pleadings at will. Although that was within his discretion, he was bound to have in mind, when deciding whether or not to receive the Minute, the fact that in the normal course of things the pursuer would have been free to alter her case, in the manner proposed in the Minute, by adjustment and thus without any leave of the court. That is an important consideration to be balanced alongside the time which has elapsed since McManus and during which parties appear to have been blissfully unaware of the dormant nature of the process.”

He concluded: “If a defender were able to persuade the court that he was prejudiced, because of the late introduction of new matters which required to be investigated for the first time some years after the event, that could merit refusal. However, the defenders had notice of the pursuer’s case that the house was not habitable at the start of the tenancy in terms of the Chapter 43 statement of claim. In the somewhat unlikely event that they did not carry out appropriate investigations at or about that time (or when claims were initially intimated to them in advance of proceedings), the fault must be attributable to their own inaction. The court is not satisfied that the proposed amendment causes the defenders any substantial prejudice.”

For these reasons, the Lord Ordinary’s interlocutors in relation to this and other related actions were recalled, and for the pursuer’s minute of amendment to be received.

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